DailyFinance.comhttp://www.dailyfinance.comDailyFinance.comhttp://o.aolcdn.com/os/df/2013/img/2-dailyfinance_logo_m.pngDailyFinance.comhttp://www.dailyfinance.comen-usCopyright 2015 Weblogs, Inc. The contents of this feed are available for non-commercial use only.Blogsmith http://www.blogsmith.com/How Much Is Too Much to Borrow for College?http://www.dailyfinance.com/2014/11/15/how-much-is-too-much-to-borrow-for-college/http://www.dailyfinance.com/2014/11/15/how-much-is-too-much-to-borrow-for-college/http://www.dailyfinance.com/2014/11/15/how-much-is-too-much-to-borrow-for-college/#commentsFiled under: Student Loans, College, PlanningOJO Images RF/Getty Images
With high school seniors in the thick of college applications season, parents of teens everywhere are discussing how they're going to pay for their educations. Most families cobble together a mix of savings, grants, scholarships, wages from part-time jobs, and loans.

Oh, those loans: We've all heard plenty about the student debt crisis. At this point more than $1 trillion is owed in U.S. college debt, a staggering amount, and the average student loan debt now is $29,400.

Which leads to the obvious, if too rarely asked, question: For the individual, how much is too much to take out in student loans? Craig Myers, founder of CR Myers & Associates in Southfield, Michigan, says his advice is simple: "As little as possible." Sound easier said than done? Here's some guidance.

Reducing Your Borrowing

Pat Simasko, president of Simasko Law in Mt. Clemens, Michigan, says he tells his clients to have their students apply for every scholarship and grant imaginable. "As a father of three, I know we all want our kids to go to the best college in their chosen field; however, when life takes unexpected twists and turns, the college fund is the first item parents will draw from," he says.

In addition to researching scholarship and grant opportunities, "Many kids keep their educational costs down by starting out at a community college for their first two years of basic curriculum. This way they can save their loans for later enrolling in their specialty at a university."

Simasko agrees, suggesting that parents have their kids live with them while they earn their associate's degrees, and that the students also work part-time to save money for their final two years at a university.

How Much Should You Borrow?

The general rule of thumb is that the total student debt should not be more than the borrower's anticipated annual salary the first year out of school, says Ernest Romero, founder of CoreCap Solutions in Sterling Heights, Michigan. "Future artists and musicians would be wise to borrow less than future computer programmers or engineers," says Romero. "The monthly repayment of the loan should not be more than 10 to 20 percent of their anticipated future monthly salary."

Myers agrees and suggests that parents also look at the financial growth opportunities in the profession their child intends to pursue. "Once you have an idea of their future income, you can then determine a reasonable loan amount that won't drown them when it comes time to pay it back."

However, the challenge, Simasko says, is that few freshmen in college know what they want to do when they graduate, and even if they do, they don't always know what the salary will be or if they'll be able to get a job in their chosen field. In that case, families would be wise to estimate a minimum anticipated salary after graduation and limit borrowing to a loan with a repayment schedule that would be affordable at that salary level.

Also, reminds Myers, "When a student loan is taken out, it should be used only for school tuition, not to help pay rent, go out to eat or for other extras. If the student wants those extras, they should be paid for by earned income."

Parent Loan or Student Loan?

Government student loans are preferable over private student loans because they typically carry lower interest rates, but some parents may be tempted to take out a loan in their own name so as not to burden their kids with too much debt. However, financial planners recommend having the students, rather than their parents, borrow for college.

"For most loans, it makes sense for the student to take on the loans in their name, because of the future options that may be available, including student loan forgiveness programs as well as various repayment programs that could benefit the student and not the parents," says Romero. "For example, Mrs. Smith takes on $40,000 of student debt in her name to help her son pay for his education, and now she is having a hard time making payments on the loan. However, her son is working for a qualified nonprofit that would have allowed for student loan forgiveness if only the loan had been in his name."

Romero recommends that students look into options for loan forgiveness programs when they apply for a student loan. Simasko agrees: "Everyone is so confident at the time when the student is being accepted to a huge university that when they come out of college they will be immediately making the money to cover the loan payments, but the reality of the situation and what I see firsthand in my office is that 80 percent of graduates in their first job can hardly afford basic living expenses."

]]>going to collegePaying for collegesaving for collegestudent debtstudent debt crisisStudent LoansMichele LernerSat, 15 Nov 2014 06:00:00 ESTParents: Are You Legally Ready for Your Kids to Be Adults?http://www.dailyfinance.com/2014/11/14/parents-legally-ready-children-become-adults/http://www.dailyfinance.com/2014/11/14/parents-legally-ready-children-become-adults/http://www.dailyfinance.com/2014/11/14/parents-legally-ready-children-become-adults/#commentsFiled under: Credit Cards, College, Planning, Life Stage Lessonsjupiterimages
Few parents greet their children's 18th birthdays with the joy of crossing a marathon's finish line, thinking that their job is done. But in some ways, it is. Your 18-year-old may or may not seem like an adult to you, but in the eyes of the legal and financial world, that birthday represents a major shift.

John O. McManus, an attorney and founding principal of McManus & Associates in New York, says that parents need to be aware that once their children turn 18, regardless of how many things stay the same, legally, a lot changes. For example, parents of legal adults are no longer automatically able to access their children's financial or medical accounts or information, and they won't be allowed to make medical decisions on behalf of their offspring. However, parents can take steps to smooth the transition into adulthood, and to make sure they can continue to help their kids when needed.

Legal Tasks

McManus says that because parents cannot automatically take action to benefit their adult children in the event they need medical care or are incapacitated, he suggests that families:

Have their adult offspring complete a health care proxy that give parents the right to make medical decisions if their child cannot.

Have them assign a durable power of attorney so that that parents can handle financial and legal issues on behalf of their kids if needed.

Complete an authorization for release of protected health information so that parents can provide this information to medical personnel and use the information to make decisions on behalf of their kids.

"These issues take on extra urgency if your child is away from home in college or out of the country on a semester abroad," McManus said. In such cases, he recommends learning about the health care system in the country where your child will be living to understand the differences between private and public hospitals and any restrictions on international insurance.

"Colleges will not release a student's medical records, even to parents, if the student is over 18," he said. "This may be extremely detrimental to a child's well-being in a physical or emotional medical emergency. Advance planning can facilitate communication between the foreign hospital and parents."

Financial Tasks

Hopefully you have been teaching your children about money long before they reach 18, but Ric Runestad, principal of Runestad Financial in Fort Wayne, Indiana, said that once they hit that milestone you should start testing what they've learned.

"I'm a proponent of parents co-signing for a credit card with a low limit that only the parents can raise," he said. "This will give the parents information on exactly what it is their children are spending their money on, and it will also get the child used to the idea of paying off their credit card every month."

Chris Alberta, principal of Alberta Enterprises in Brighton, Michigan, agrees that parents should open a credit card account with their kids as well as a joint checking account when they turn 18 to help them manage their money.

Financial Education

"Let's face it. ... Today's young people are financially illiterate, and the modern dilemma has much to do with over-borrowing and lack of financial education," Alberta said. "So instead of letting them get that first credit card on their own and go on a shopping spree, or finance that first car at 20 percent or more, get involved. Co-signing for anything could put you on the hook for your kids, but it's much better to be on the hook with the kids. Let them charge their gas, meals out, necessities, etc. By managing charges and opening a joint checking account with them, you'll be able to see the charges made and make sure the bills get paid each month."

Alberta says that taking these steps can help your kids build a strong credit history that will make it easier to win an approval for financing for their first car or their first home. "Establishing the difference between needs and wants, along with never borrowing more than we earn, are timeless lessons that every kid can benefit from," Alberta said.

Runestad also says parents should reinforce the concept of being responsible. "From the age of 18 on, your children are legally responsible for the things they do. If they acquire debt or drop out of college, those choices are theirs alone. Learning to accept responsibility is a huge part of being an adult, and when your child turns 18, this is a great opportunity to have that talk."

]]>1820sadultadulthoodfinancialfinancial educationfirst jobgoing to collegegrown-upshealth carehealth insurancelegalMaturemedicalparentingparentsMichele LernerFri, 14 Nov 2014 06:00:00 ESTHow to Handle Finances With Your Boomerang Kidhttp://www.dailyfinance.com/2014/10/22/boomerang-kid-finances/http://www.dailyfinance.com/2014/10/22/boomerang-kid-finances/http://www.dailyfinance.com/2014/10/22/boomerang-kid-finances/#commentsFiled under: Family Money, Personal Finance, Budgeting, Planning, Financial EducationJeff Gilbert/Alamy
The surge in adults returning to live with their parents after college and beyond is taking a significant bite out of those parents' finances. According to the Pew Research Center, the number of adults ages 25 to 34 living with their parents or grandparents rose from 11 percent in 1980 to 23.6 percent in 2012.

Many recent college grads and young adults are living at home for the most obvious reason: because they are unemployed. Financial experts warn parents against derailing their retirement plans by helping their adult kids too much, but they say their clients run the gamut from being too lenient on their kids to too strict. Here are their suggestions for how to balance the desire to help your kids get started in life with concern for your own financial well-being.

On the Job Hunt

The overarching rule parents should follow for college kids returning home is that they are not running a retirement home for people in their 20s, says Ric Runestad, owner of Runestad Financial in Fort Wayne, Indiana. If the kids graduated from college, they should be either working full time or looking for full-time work, he says.

"I see a lot of my clients letting their children who are just graduating college return to the household living absolutely free," says Joe Dadich, owner of Dadich & Associates in Troy, Michigan. "I understand the parents' compassion and wanting to be there to help them get on their feet; however, it is imperative that a plan is put in place."

At the opposite end of the spectrum, Dadich had a client with a son who lost his job. The father wouldn't let him move back in until he got his finances straightened out. "The son ended up having to move to another state to find a job, and since then a rift has formed between the father and son," says Dadich. "This could have been easily avoided if an arrangement would have been made for the son to contribute to the household."

Spell It All Out

How should parents handle the financial expectations for the living arrangement? Bill Demaree, owner of Demaree Retirement Services in Indianapolis, says parents need to establish an agreement with their kids that leaves nothing to interpretation. "You need to specify a lease with an amount for rent, a percentage of the utilities and how long the child can stay in the house," says Demaree.

In addition, Runestad says he believes it's fine for parents to allow their kids to stay at home for a period even after the kids are employed to allow them time to build their savings. However, it's important for parents to collect rent. "This focuses your child's attention on the constant need to make their rent payments. A landlord doesn't care," says Runestad, about any extenuating circumstances that might arise. "They just want their rent money."

Runestad says that when he and his brothers graduated from college and returned home, his father raised their rent by a set amount per month until they moved out. "By creating leverage, our father helped instill a sense of urgency to [our moving out]," he says. "[Living at home] was a temporary privilege and not a permanent right."

Chores and Other Bills

Dan White, a certified financial planner with Dan White and Associates in Glen Mills, Pennsylvania, says kids should at least cover their own expenses, such as their car, auto insurance, and cell phone.

Dadich tells parents to make a two-year plan that includes financial responsibilities and a chore list. He recommends a payment plan based on a percentage of their income that they can contribute for rent, their cell phone bill, student loans, and other personal expenses. Since it's a percentage based on income, the amount can rise when their income does or fall if their income declines. "I think you need to make the adult child put some skin in the game to make sure they're truly invested in their future success," he says.

Runestad agrees that allowing boomerang kids to live at home can give them breathing room to get better established in life. "However, the parents need to protect against the safety net they provide becoming a hammock for their adult children," he says.

]]>20s40s50sbillsboomerang generationboomerang kidscollege grads unable to find jobscollege graduatesfinancefinancial literacymoving back homeparentsrentunemployedMichele LernerWed, 22 Oct 2014 06:00:00 EST6 Estate Planning Moves You Should Make in Your 30shttp://www.dailyfinance.com/2014/10/10/estate-planning-moves-30s/http://www.dailyfinance.com/2014/10/10/estate-planning-moves-30s/http://www.dailyfinance.com/2014/10/10/estate-planning-moves-30s/#commentsFiled under: Estate Planning, Wills, Living Will, Long Term Care Insurance, Life InsuranceJackF
When you're in your 30s, planning for your eventual demise is likely to be low on your list of priorities. However, financial experts suggest that this could be the best time to start acting to protect your family and your assets in case the unexpected occurs.

"It is imperative that those in their 30s have their estate plans in order, because they have as much to lose as their elders -- in fact, sometimes more," says Dan White, owner of Dan White & Associates in Glen Mills, Pennsylvania. "You may be just settling down and getting married, purchasing your first home, and, most important, starting a family, which will now need to be protected."

To get started, experts recommend meeting with an attorney and financial adviser to put the following elements in place:

1. Last will and testament. A will establishes who will inherit your possessions and assets when you die, but Douglas A. Boneparth, vice president and chief operating officer of Life and Wealth Planning in New York City, notes a will has other vital aspects. "A will also states other important information such as who you want to place in charge of administering your estate and who you want to be the guardians of any minor children."

2. Living will. A living will outlines your wishes if you are incapacitated, death is imminent, or you are in a persistent vegetative state, says Boneparth.

3. Durable power of attorney. You should have a written durable power of attorney letter, which identifies someone who can make financial decisions for you if you're incapacitated and who can do things like pay your bills and manage your assets, says Boneparth.

4. Health care proxy. This document permits a specified person to make medical decisions on your behalf. "It even may make sense to have a conversation with the person you identify so that they clearly understand what your wishes are -- God forbid these circumstances arise," Boneparth says.

5. Life insurance. Term insurance is generally a cheap, cost-effective way to cover current debts that you don't want to straddle your significant other with should something happen to you, says Julian Guilfoyle, vice president of Cooper & Adel Financial in Centerburg, Ohio. Craig Myers, founder of CR Myers & Associates in Southfield, Michigan, says many of his clients opt for a permanent life insurance plan to fund retirement, growth, educational savings and general accumulation. "My young clients also appreciate the ability to utilize this permanent vehicle as a funding resource for spontaneous financial opportunities or unforeseen emergencies," he says.

6. Retirement fund. Guilfoyle says it's essential for 30-somethings to start saving for retirement, particularly if their employers offer incentives such as profit-sharing or matching contributions to a 401(k). Make sure you update the beneficiaries of any retirement savings plans.
After all of these items are in place, it is very important to review them annually with the professional who put the estate plan together, says White. "If you changed jobs and have a new 401(k) at work or expanded your family, you want this professional to evaluate everything properly," says White. "A common mistake I see way too often is people forgetting to name or change their beneficiary as their lives change. By not taking the time to write down one name, you could tie everything up in probate for months to years."

]]>30sdurable power of attorneyestate planningfamilyhealth care proxylast will and testamentliving willpowerofplanningretirement fundsretirement planningMichele LernerFri, 10 Oct 2014 06:00:00 EST5 Basic Money Management Lessons for Teenshttp://www.dailyfinance.com/2014/09/26/5money-management-lessons-teens/http://www.dailyfinance.com/2014/09/26/5money-management-lessons-teens/http://www.dailyfinance.com/2014/09/26/5money-management-lessons-teens/#commentsFiled under: SavingSyda Productions/Shutterstock
A study by the Organization for Economic Cooperation and Development found that the United States ranked No. 9 out of 18 countries in financial literacy among 15-year-old students, scoring eight points below the overall average. This poor performance, linked in part to literacy and math skills, may also be tied to the fact that most young Americans receive little or no money management education at school.

"Most teens these days do not have sound knowledge about personal finance, even when it comes to something as easy as the difference between a credit and debit card," says Gregg Murset, a certified financial planner and the founder and CEO of MyJobChart.com. "Apparently, kids are not being taught these important lessons at school, so it's up to parents to teach their kids personal finance."

"Since most kids aren't receiving proper financial education, many of them don't understand the basic meaning of many critical financial terms," says Murset. "Terms like credit, debit, APR [annual percentage rate], payday loans, national deb, and 401(k) are all things that kids should know before they apply for their first job. The important lesson here is that once kids have an understanding about what these words mean, then they can begin to apply them to real-life settings."

2. Create a Visual Savings Plan

Label three empty containers "gifts and charity," "savings" and "spendable money," recommends Bill Demaree, president and founder of Demaree Retirement Services in Indianapolis. With your teenagers, decide what percentage of the weekly allowance will go into each one so they can see the containers filling up with money. When the containers are full, he suggests handling each one differently.

"Have them take the 'gifts and charity' can and figure out what organization they are going to give this to -- say, their local church or their favorite charity," he says. "If it's local, have them go to the facility and donate the money in person, so they have a sense of accomplishment and better understand how their hard work went to benefit a greater good."

Similarly, Demaree recommends physically going to the bank with the savings container each month with your teens so they can see the account grow firsthand.

"The 'spendable money' will be the teenager's favorite opportunity," says Demaree. "Let them go to their favorite store and buy the item they've been saving up for, or if it's a higher-ticket item, put the money back in that container and let it grow until it's enough to buy the item."

3. Talk About Credit

When your child turns 18, this is a good opportunity to start talking to him or her about building credit and the importance of having good credit, says Tyler Tran, founder of Tran Financial in Azusa, California.

Tran recommends that 18-year-olds apply for a credit card after you discuss various card offers and interest rates. You should talk about the importance of building a good credit profile by paying the balance in full each month. If you cosign the credit card application, you should monitor the account to make sure the bills are being paid on time.

Murset says parents need to make sure their kids understand the major differences between debit cards and credit cards, including benefits, percentage rates, security issues and liability if the card is used fraudulently.

"Kids see their parents using cards all the time for buying things but rarely see any payments being made," he says. "This can give them a sense that credit cards are just free money that adults get to use. As you explain how credit cards work to your kids, make sure you make it very clear that there is nothing free about credit cards."

4. Show Kids That Work Reaps Rewards

Give your kids assigned tasks every day of the week, such as taking out the trash, vacuuming, loading and emptying the dishwasher, washing the dog, mowing the lawn or shoveling snow, suggests Demaree, and determine how much they will get paid for each task or week.

Murset says that while kids fully understand the spending part of the money equation, they need help grasping the earning, saving and sharing parts.

"Kids need to be given more structure either in the form of chores around the house or working in the community," he says. "While saving and sharing money may not be the most popular things for kids to do with money they earn or are given as a present, they are key components to strong financial health as an adult."

5. Let Kids Fail

"Let your child make a mistake with their money, spending all of their money on something trivial -- and then it's gone, and they have nothing to show for it," says Tran. "When the new video game comes out that they want and they have wasted their money on something else, it's a good lesson in saving and spending money wisely."

Parents can also share their own stories with their kids about personal financial failures and successes as part of their effort to educate their teens about money management. If you feel your knowledge about money is inadequate, you can reach out for personal finance tips for teens from a variety of sources, such as financial planners, banks and credit unions, and sites such as Mint.com and PracticalMoneySkills.com.

]]>allowancebudgetcharitychorescredit cardsdebit cardsfinancial educationhigh schoolpersonal financesavingsteenteenagersMichele LernerFri, 26 Sep 2014 06:00:00 ESTMore Women Taking the Lead in Personal Finance Decisionshttp://www.dailyfinance.com/on/women-personal-finance-decisions-taking-lead/http://www.dailyfinance.com/on/women-personal-finance-decisions-taking-lead/http://www.dailyfinance.com/on/women-personal-finance-decisions-taking-lead/#commentsFiled under: Family Money, Personal Finance, Budgeting, Marriage, PlanningGetty Images
When it comes to making personal finance decisions, women are taking the lead, a recent survey by Ameriprise Financial called "Women and Financial Power" reveals. The survey, which included women ages 25 to 70 with at least $25,000 in investable assets, found that 56 percent of women say they share in making choices with a spouse or partner. Another 41 percent said they're making financial decisions on their own, including 37 percent of this group that are in long-term relationships.

The percent of women who believe it's their responsibility to understand their financial situation is higher among older women: 91 percent of baby boomer women, compared to 84 percent of Gen X women and 80 percent of millennial women.

Financial experts have suggestions for women in different age groups to help them take responsibility for their money.

Baby Boomer Women

Seventy-six percent of the baby boomer women (ages 55 to 70) surveyed by Ameriprise have a financial plan, compared to 56 percent of younger women. Overall, of women who share financial decision-making with a partner, baby boomer women are more likely to be involved in all five aspects of planning the study covered -- budgeting, saving, investing, insurance and estate planning -- than younger women.

"Baby boomer women face some of the biggest financial decisions of their lives between retirement and Social Security choices, so having trusted partners in their spouses and financial professionals is incredibly important," says Michelle Young, an Ameriprise financial advisor in Edina, Minnesota. "For those boomer-age women who are primary financial decision-makers in their households, we learned that this role can make older women feel anxious. These women are less likely to be in this role by choice. Asking for advice and help from a trusted friend, family member or financial professional can make financial decisions less intimidating, and creating a long-term financial plan can also help reduce anxiety."

Gen Xers

The Ameriprise survey showed that 62 percent of Gen X women say they're afraid they aren't saving enough and 30 percent don't feel in control of their finances.

"The most important thing women ages 35 to 54 can do to feel more financially confident is to set aside some time during their busy lives to focus on their finances and to create a financial plan that includes a monthly budget, retirement savings, proper insurance coverage, and an emergency fund," says Young. "Having these things in place will help these women mitigate some of the expensive life events -- expected and unexpected -- that can occur at this stage of life."

Pamela Yellen, a financial expert, author and editor in chief of The Women's Financial Edge, says that Gen Xers are frequently sandwiched between elderly parents who need may need financial help and kids who are either still at home, off in college or back at home because they can't make it on their own in this economy. All of those pressures often lead Gen X women to put their own financial futures in jeopardy.

"To get in control of their finances, Gen X women need to work toward adopting the 10/10/10 savings strategy," says Yellen. "Set aside 10 percent of your income for short-term needs such as vacations and gifts. Set aside another 10 percent for anticipated mid-term needs and emergencies, like a new car, college tuition or replacing a roof or major appliance. Set aside another 10 percent for long-term retirement planning. The money that's left over? That's what you have to spend."

Millennials

More millennials say they learned about finances from one or both of their parents than do women from older generations (62 percent compared to 45 percent of older women). And 26 percent say that making informed financial decisions defines success in their lives, vs. just 19 percent of the Gen Xers. In addition, more of these women said that a milestone or challenge in their life caused them to revisit their financial strategy and save more.

Millennial women are more optimistic about their financial future than Gen Xers, says Young. "More of these women [than in the other generations] who are primary financial decision-makers for their households say it's because they want to be or because they feel more knowledgeable than their spouse or others who help them with finances," she says.

"To gain control over your finances, every young millennial woman needs to stop taking the path of least resistance." - Pamela Yellen

In fact, 50 percent of millennials say they are "more knowledgeable than my spouse/partner" (compared to 47 percent of Gen Xers and 35 percent of baby boomers) and 41 percent "enjoy making these kinds of decisions" (compared to 25 percent of Gen Xer and 23 percent of baby boomers). Yellen says millennials are the most risk-averse group and the most committed to funding their retirement, but she suggests that millennials avoid target-date retirement funds.

"To gain control over your finances, every young millennial woman needs to stop taking the path of least resistance," says Yellen. "Rather than throwing your money and trust into the default investments of your employer's retirement plan, you need to do your homework and insist that your money gets invested in truly low-cost indexed mutual funds benchmarked to the broad stock market."
While the Gen Xers in the survey face more challenges and hurdles than the millennials or baby boomer women and are currently the least likely to have a financial plan, hopefully the example set by the older generation that values financial security will encourage Gen Xers to seek financial advice to improve their situation.

Michele Lerner is a Motley Fool contributing writer. To learn more on ensuring a comfortable retirement for you and your family, see our free report in which Motley Fool retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule to boost your retirement income.

]]>baby boomersbudgetingestate planningfamily moneyfinancial decision makinggen xgender rolesinsuranceInvestingMillennialspersonal financepowerofplanningSavingwomenMichele LernerFri, 12 Sep 2014 11:20:00 ESTAvoid These Estate Planning Nightmareshttp://www.dailyfinance.com/2014/08/20/avoid-estate-planning-nightmares/http://www.dailyfinance.com/2014/08/20/avoid-estate-planning-nightmares/http://www.dailyfinance.com/2014/08/20/avoid-estate-planning-nightmares/#commentsFiled under: Personal Finance, Estate Planning, Wills, Marriage, Financial EducationAuremar/Shutterstock
A serious illness, family crisis or death in the family can bring out the best behavior among relatives -- or the worst. According to the 2014 Intra-Family Generational Finance Study by Fidelity Investments, 64 percent of parents older than 55 who have at least $100,000 in investable assets and their adult children over 30 aren't on the same page about when the right time is to have conversations about estate planning. Even among those families that do talk about these topics, few get into the level of detail that's recommended. The study found that 31 percent of parents say they haven't talked in detail about estate planning; an additional 10 percent haven't discussed the subject with their offspring at all.

One reason that estate planning is so complicated and emotionally fraught is that adult offspring often confuse love and money. "What many parents don't understand is that their children do not see an inheritance as dollars, they see it as 'love units,' " says Ken Moraif, a certified financial planner or at Money Matters, a wealth management and investment firm in Dallas-Fort Worth.

Problems can arise when parents decide to leave a bigger inheritance to one child because, for example, that child isn't doing as well financially as another. "The child that received the smaller inheritance interprets that as 'Mom and Dad loved my sibling more than me,' " says Moraif. "This creates resentment and ill will that the parents had no intention of creating." He says parents should individually explain a disproportionate inheritance to each adult child and allow them to vent their frustrations, so that they don't feel punished for their success or less loved.

Hurt feelings and misunderstandings aren't the only inheritance troubles that can plague families. Consider the following real-world stories of times when estate plans (or lack thereof) went awry.

1. Failure to Plan

"We recently faced an unfortunate situation with a grandson who had lived with his grandfather for 30 years because his mother wasn't in his life and his father had died," says Pat Simasko, founder of Simasko Law in Mount Clemens, Michigan. The grandson put his life on hold to take care of his grandfather as he got older, but when the grandfather passed away, the grandson wasn't entitled to any inheritance.

"The grandfather never put his $750,000 estate in proper order," says Simasko. "There wasn't anything that could be done. It truly amazes me that if a person would take one to two hours to properly plan, future disappointments could be avoided."

2. Derailed by Simple Administrative Details

Craig Myers, a financial adviser and president of CR Myers & Associates in Southfield, Michigan, says he met with a woman whose mother left a trust that stated that her children were to inherit 100 percent of the estate. There was even a prenuptial agreement with her new husband stating that all of her assets prior to the marriage were to go to her daughter.

Unfortunately, the beneficiary designations on the accounts were never changed to name the trust, and as a result of this oversight, her new husband received 100 percent of her estate. "Someone may have a trust that explains their wishes upon death," Myers says, "but if their beneficiary designations are not properly titled, they could disinherit their family without meaning to do so."

Dan White, a financial adviser and founder of Dan White and Associates in Philadelphia, had a similar problem with a client whose husband passed away from a heart attack during their vacation in Spain.

"Her husband was a self-employed lawyer," says White. "He put together all the paperwork, but forgot to take care of the biggest item. ... He never named a beneficiary. Everything had to go to probate, and it took her months to sort out this mess." White stresses to his clients the importance of having a professional review all paperwork. "One proofread through the document, and all of the delays would've been avoided."

3. Cross-Country Squabbling Siblings

A client of John O. McManus, an estate attorney and founding principal of McManus & Associates in New York City, had a client whose daughter lived on the West Coast and son and daughter-in-law lived close to her on the East Coast. The children had joint power of attorney, and the daughter would sign blank checks so that her brother and his wife could pay for things their mother needed without constantly needing her signature.

"The son wrote his wife checks from his mom's account as a salary to pay her for taking care of his mother, which caused some tension between the siblings," says McManus. "Due to the son's history of run-ins with the law, the daughter was wary of letting him have too much power over his mom's estate."

Ultimately, the mother named the daughter as sole executor. But after the mother passed away, the daughter-in-law took things out of the house that she claimed were hers or were "intended for her" by the deceased mom. "The daughter called the cops to have the daughter-in-law arrested when she would not leave the home of the decedent," says McManus.

McManus was able to get both parties to agree that the daughter-in-law could go through the house with the estate sales team to select items that she claimed were left to her, and the company would value these items to be deducted from her share of the deceased's estate.

To avoid situations in which relatives fight over individual property, it's best to include a written list of items of value with designated recipients in your will.

4. Blended Family Brouhaha

Lauren Brouhard, vice president of retirement at Fidelity Investments, says that census data shows that blended families now outnumber traditional families in the United States. And stepparents, stepsiblings, and half-siblings can make estate planning much more complicated.

For example, a mother may want to leave different inheritances to her biological children than she does to her stepchildren, or want to protect her biological family's inheritance in the event anything happens. "Without a meaningful discussion with the family about her intentions -- and some follow-up steps to ensure these intentions are carried out -- things can end up quite different than expected," says Brouhard.

McManus recalls a client who died, leaving an administrative mess that led to an extended and complicated estate settlement process involving the man's ex-wife, kids and current girlfriend.

For more than a year, there was a fight over who could open one of the client's storage units. "Finally, we were able to find a day that lawyers from all the represented parties could go together to open the unit," McManus says. "We had to count every item down to the socks to create an itemized list of contents to be divided among the heirs."

The haggling over every detail of the deceased's estate continues, McManus says: "His ex-wife, kids and current girlfriend are still fighting over anything and everything, including airline frequent flyer miles. We had to value the miles, investigate the transfer of ownership to an estate name and then equitably divide them."

Don't Leave Your Heirs a Mess

A detailed will, properly identified beneficiaries, and designated recipients of effects from an estate can reduce the chances of a free-for-all after a death, although when multiple parties are involved who were already arguing before the parent's death, the chances are high that lawyers will be brought into the fray.

"The point is, if parents don't make it clear what they want when it comes to things like estate planning, there's a strong likelihood things won't end up that way," says Brouhard. "Adult children have an important role to play in helping to clarify and carry out their parents' wishes, but this can only happen by talking things through as a family."

A recent survey by Care.com, a website for finding and managing child care, found that 75 percent of American families say they were "surprised or overwhelmed" by the cost of child care and 42 percent) don't budget for it. According to the company, the average family spends approximately $18,000 per year on child care -- often their single largest expense.

Sheila Lirio Marcelo, founder, chairman and CEO of Care.com, says for many families, child care accounts for a bigger portion of their income than their food and housing. "According to our research, the average family spends 18 percent of its income on child care," Marcelo says. But new parents may not know the scope of expenses they need to budget. What's more, the survey found that 52 percent of families aren't aware of tax breaks for child care expenditures.

Resources for Child Care Costs

The best budget for all things -- especially big expenses like child care -- is an accurate one. The first step, says Samara Gonzalez, a certified credit counselor with ClearPoint Credit Counseling Solutions, is to research cost ranges for different types of child care in your area. "Sometimes this involves word-of-mouth as well as calling around to get a sense of the costs," says Gonzalez.

Those costs may seem overwhelming, but there are resources that can make them more manageable. Employee benefits, tax breaks, and subsidies can reduce your out-of-pocket child care expenses, but you need to search for them.

Flexible Spending Account. If your employer offers an FSA ,you can set aside up to $5,000 of your salary before taxes to use for child care expenses. "This simple step saves the average family about $2,000 per year," says Care.com's Marcelo.

Employee benefits. Look into your options for on-site day care or a flexible work schedule to reduce your child care costs. Marcelo says you should ask your employer's human resources department about possible benefits, such as child care reimbursements and resources to help you find a nanny or back-up care.

Child care tax credit. "If your company doesn't offer an FSA, you can still get the child care tax credit, which lets you itemize up to $3,000 in expenses per child, per year on your tax return up to an annual cap of $6,000," says Marcelo. You can find out more information about the tax credit on the IRS website.

Subsidized care. Depending on your income level, you may qualify for subsidized care. Ask providers if they offer fees based on your income.

Types of Child Care

While nannies, au pairs, day care centers and in-home day care centers are among the most common methods of child care, parents can devise alternatives.

Some parents rely on friends and family who are retired or unemployed; others are able to work out a flexible schedule or telecommute to reduce or eliminate child care expenses, says Rebecca Gershowitz, a counseling manager at ClearPoint. Another option is to look into sharing child care services -- such as a nanny -- with other parents. "Others may barter for skilled services they can provide, such as hairdressing or carpentry," she says. "They may also employ church-operated day care centers and schools in order to take advantage of need-based financial assistance."

If you're thinking of a more traditional child care system, here are some pros and cons:

Nanny: Nannies are professional caregivers who come to your home and plan activities specific to your kids, but this tends to be the most expensive option, says Marcelo. "You should definitely do the math, though; when you have two kids, a nanny might be the cheapest option," she says.

Au pair. Marcelo says an au pair works best for older children, since these tend to be young people from another country with varied experience with kids. She says an au pair from an agency will generally cost you $360 per week as a stipend, plus room and board.

Day care center. This can be more affordable than having someone in your home, but the downside is that your child gets less attention and you'll have less flexibility.

Home day care providers. Marcelo says home day care, where one or more caregivers watch a small group of kids in their home, can be the most affordable option for families. She recommends that you check out the program to be sure it is state accredited.

"The in-home vs. day care facility was the biggest decision I had to make when I had a child," says Gershowitz. "For those who opt for in-home day care, there are other challenges, such as that many are not tax-deductible. Also, if the provider is sick, you're stuck scrambling to find someone else to care for your child for the day. Some facilities provide temporary care for the day, but that's often pricey. One I checked into was $70 a day. Or you have to call out from work and lose income if you don't have vacation time."

One of the most cost-effective ways to provide child care is to organize a babysitting co-op with other parents. She says some ClearPoint's clients have found it more lucrative to start a day care business rather than return to a traditional job.

Finding the right child care is not just a financial decision, but an emotional and lifestyle one as well. Researching your options and determining what's realistic for your budget will help ensure that the decision you make is the best one for your entire family.

]]>careerchild carefamily moneyfinancial literacyhousehold budgetmoney tipspersonal financeMichele LernerWed, 13 Aug 2014 12:33:00 EST10 Signs Your Kid Could Be Headed for Financial Failurehttp://www.dailyfinance.com/2014/07/30/10signs-child-financial-failure/http://www.dailyfinance.com/2014/07/30/10signs-child-financial-failure/http://www.dailyfinance.com/2014/07/30/10signs-child-financial-failure/#commentsFiled under: Family Money, Personal Finance, Budgeting, Planning, Financial EducationWhile parents love to look for signs that their kids are musical prodigies or potential Olympic athletes, many don't know how to recognize the signs that their teen and young adult offspring are floundering when it comes to money management skills. Dealing with your kids' disasters is one of the downsides of being a parent, yet the more proactive you are in watching for signs of potential financial failure, the easier it will be to turn around the situation.

A parent's work is never done. Throughout your offspring's life -- from childhood, the teen years, and into their 20s -- there are times you'll need to step in to educate your kids about money matters big and small. It can be a lot of work, but the payoff is worth it when you know you've done your best to raise a financially savvy person with a strong work ethic and sense of responsibility.

]]>allowancechildrenfamily moneyfinancial educationfinancial literacymoney managementparentingpiggy bankMichele LernerWed, 30 Jul 2014 06:00:00 ESTWhen Comparison Shopping Is Worth It -- and When It's Nothttp://www.dailyfinance.com/on/when-comparison-shopping-is-worth-it-and-when-its-not/http://www.dailyfinance.com/on/when-comparison-shopping-is-worth-it-and-when-its-not/http://www.dailyfinance.com/on/when-comparison-shopping-is-worth-it-and-when-its-not/#commentsFiled under: Shopping, How to Save Money, Shopping Trends, Savingjupiterimages
Consumers are advised to comparison-shop for everything, but a new survey reveals that not all time spent bargain hunting is time well spent.

Insurance.com surveyed 2,000 men and women about their comparison-shopping habits, asking people how much time they spent comparison-shopping for common purchases and how much they saved when they did the research. The company then calculated the savings per minute to illustrate when it makes the most sense to shop around.

The bottom line, if you've got a limited amount of time to comparison shop:

Savings per minute are highest for car insurance, cellphones and cable services.

Savings per minute are lowest for gas and new cars.

Given that the survey was conducted by a comparison-shopping service for insurance, it's not surprising that car insurance scored the highest in the savings per minute measurement, with an average of $54 saved for each of the 10 minutes spent comparison shopping, for a total of $540 saved. However, that calculation was based on consumers who did their comparison shopping using Insurance.com. All the rest were based on self-reported metrics about how much time the respondents spent comparison shopping and how much they saved.

Tthe survey asked consumers about how often they comparison-shop. More than half (54 percent) said the hassle of going to multiple stores or even just to multiple websites was a factor when they decided not to comparison-shop, and 40 percent said the time commitment of comparison shopping was too big.

Time Is Money -- Spend Yours Smartly

Convenience, no surprise, is key. The survey showed that consumers are typically more willing to spend time price shopping on items they can compare online as opposed to ones where the research needs to be at multiple physical locations. Even if the savings is small, so is the time commitment if it takes just a few clicks.

Another way to use your time in the wisest way is to focus on items that have the biggest savings potential in dollar terms (like major appliances), but also consider things that will reward you with an ongoing savings payoff.

For example, spending time comparison-shopping for prescription drugs -- ones that you have to take on an ongoing basis, such as ones for allergies or blood pressure -- means that you're saving money on every refill. Shopping around to find the best price for a baby shower gift, however, saves you money just once.

How Much Time Are You Willing to Spend Shopping?

The following list shows how much time on average that consumers said that they were willing to spend looking for a better price on these items:

Airfare: 68 minutes

Laptop computer: 68 minutes

Auto insurance: 63 minutes

Hotel rooms: 53 minutes

Rental car: 48 minutes

Clothing: 41 minutes

Children's toys: 36 minutes

Prescription drugs: 34 minutes

Groceries: 33 minutes

Pet food: 26 minutes

Beer or alcohol: 17 minutes

Cigarettes: 16 minutes

So, how much time are you willing to put in comparison shopping? Chime in below.

]]>buying a carcablecar insurancecellphoneComparison shoppinggasnew carMichele LernerMon, 21 Jul 2014 11:23:00 ESTIt's Time to Talk About Taboo Money Topics with Your Kidshttp://www.dailyfinance.com/2014/07/15/its-time-to-talk-about-taboo-money-topics-with-your-kids/http://www.dailyfinance.com/2014/07/15/its-time-to-talk-about-taboo-money-topics-with-your-kids/http://www.dailyfinance.com/2014/07/15/its-time-to-talk-about-taboo-money-topics-with-your-kids/#commentsFiled under: Investing Basics, Family Money, Personal Finance, Financial EducationAlamy
While a recent survey by Citi (C) shows that nine out of 10 parents teach their kids about money and 59 percent say they talk to their kids about personal finance, there are still a few financial topics that parents prefer not to discuss.

"Our survey findings showed that most parents have begun discussing finances with their children before age 13, and nearly half of respondents said that sensitive financial topics are not off-limits for conversations with their children," says Linda Descano, a personal finance expert with Citi. "However, the topics that most respondents found off-limits were 'the amount of money I make' (with 28 percent believing this was off-limits), 'the amount of savings we have' (27 percent) and 'the amount of debt we have' (26 percent)."

The study also found that 13 percent of people don't want to talk about the value of their home with their kids, and 10 percent don't want their kids to know the cost of their school's tuition. Many parents mistakenly think it's better not to discuss family financial issues with their children, says Ric Runestad, owner of Runestad Financial in Fort Wayne, Indiana. He says reasons for believing money is a taboo topic include:

Some parents don't want to trouble their kids with adult concerns about their income, debt and savings.

Some parents are afraid their kids won't respect them if they don't make much money and have a lot of debt.

Some parents with a high income and a lot of savings fear their children may become more demanding for material objects knowing their parents can easily afford them.

"A concern for all parents is that their children may not be discerning about whom they discuss family financial issues with and that they might share information with people the parents would rather not want to know about their financial matters," says Runestad.

Avoiding the Issue

According to an Ameriprise (AMP) study, "Money Across Generations," 35 percent of adults say that discussing money and finances with their family members is likely to cause a disagreement.

"If this is the case with your partner or other adults in your family, save these conversations for times when your younger children are not around," says Suzanna de Baca, vice president of wealth strategies at Ameriprise. "It's important to have financial conversations with children of all ages to provide opportunities for teaching and learning, but young children can be especially sensitive to arguments and it may cause them to view all financial discussions with negativity as they age."

In the same study, 70 percent of American adults said that growing up, their parents rarely or never talked about how much money the family had, but 75 percent said their parents regularly or occasionally talked about the importance of saving money.

"If you're hesitant to discuss how much you [and your spouse] make in income each year, that's OK, but don't avoid all financial conversations," says de Baca. "Talking about the value of saving and making prudent financial decisions with your children can have a lasting impact on their financial attitudes."

Overcoming the Taboo

Financial experts say talking about money is one of the most important ways kids can learn how to handle their own finances as they become adults, particularly because financial literacy has yet to become a standard part of every child's education.

"Part of being a good role model includes being open about money (especially as kids get older) and not being afraid to share your money mistakes, in hopes that they won't repeat them," says Descano. "This is obviously a very personal decision as a parent, but making your child aware of the financial context of the things they have and being open with them about the financial realities of life is really important in raising financially-savvy children, especially as kids enter high school."

Runestad says that discussions about financial decision-making should be frequent, but he says any discussion about family finances should start with an explanation that the information isn't to be shared with anyone outside the immediate family.

"When parents should start including the children in discussions of family finance will be driven in part by the children themselves," says Runestad. "The children should be responsible enough to handle the information and its confidentiality. They must have shown the maturity to process this information."

Tips for Talking to Kids, From de Baca:

Know your child's level of financial maturity and asses what's relevant for them to know about your household finances. If you're not comfortable telling them how much you earn (whether you're financially comfortable or not) or that you're struggling to make ends meet, don't feel obligated to share with them. However, it's important to have an age-appropriate conversation with your children if a financial event has caused you to change your lifestyle significantly or if you're trying to teach them about responsibilities that come with being financially fortunate.

Keep in mind that kids learn by getting involved. Whether you're planning a family vacation or budgeting for groceries, consider involving your children. Asking for their input will engage them and give them a sense of financial responsibility. Have them plan a family activity within a certain price range or compare prices at the store.

If there is tension about money in your household, make sure you frame the resulting conversations in a productive way. For example, if you're feeling stretched by your mortgage payments, rather than lamenting about money woes or stressing in front of your children, loop them in on how you make decisions between your financial obligations and other purchases that are considered "wants." Demonstrate to them what percentage of your income you're contributing to savings and how you budget the rest.

Talking about money can be as tough as talking about any other taboo subject, but sharing your financial experience can smooth the way for your kids as they get older.

Motley Fool contributor Michele Lerner has no position in any stocks mentioned. The Motley Fool owns shares of Citigroup. Try any of our Foolish newsletter services free for 30 days.

]]>childrenCitigroupdebtfamily moneyfinancial educationFinancial Literacyincomemoney and kidsparentstabooMichele LernerTue, 15 Jul 2014 10:20:00 ESTWhat Worries Parents Most About Their Kids' Financeshttp://www.dailyfinance.com/2014/07/12/what-worries-parents-most-about-their-kids-finances/http://www.dailyfinance.com/2014/07/12/what-worries-parents-most-about-their-kids-finances/http://www.dailyfinance.com/2014/07/12/what-worries-parents-most-about-their-kids-finances/#commentsFiled under: Family Money, Financial Educationfasphotographic/Shutterstock
Whether you're a helicopter parent who frets over every one of your child's activities or a free-range parent who takes a hands-off approach to raising your kids, you are both likely to share a concern about your children's financial future. And it's generally not a happy view.

A recent survey by Citi of 1,500 parents found that 56 percents of parents surveyed "are not confident that life for their children's generation will necessarily be better than it has been for their generation." Parents worry about a range of financial issues their children will face:

71 percent think saving for a home will be a major concern for their children.

71 percent think their children will struggle to have enough money for major expenses such as a car or education.

69 percent think their children will be concerned about having enough money for emergencies.

69 percent of adults think their children will also worry about their own children's financial future.

On a more positive note, nearly nine out of 10 parents are teaching their children about money. "It's encouraging to see parents taking matters into their own hands," says Linda Descano, a personal finance expert with Citi. "Parents are doing various financial education activities, whether it's talking to their kids openly about their family's financial circumstances or taking them to the bank to teach them about money."

Ric Runestad, owner of Runestad Financial Services in Fort Wayne, Indiana, divides the concerns as micro-financial and macro-financial. "On the micro-financial or personal finance side, parents should be concerned that their children are able to find financially rewarding careers, but even more important, that they're financially responsible," he says. "People who spend whatever money they have right now often have an entire financial system working against them, instead of for them."

Tips for Anxious Parents

While parents can't do much to alleviate concerns about macro-financial perils -- such as the exploding costs of education and housing and a stagnant economy -- they can make sure their children know enough about money management to deftly deal with whatever life throws them.

Teach financial responsibility. It's natural to fear that your children will take on too much debt or be unprepared for financial emergencies when they reach adulthood. But you don't have to wait until they make a mistake to prepare them to be financially responsible. "It's important to remember that it's never too early to start talking to kids about money and saving," says Descano. "When they're young, you'll want to start with more simple conversations about money (sharing tidbits about your purchase decisions with them when you shop) and as they get older introducing more complex money matters (such as the value of having an emergency fund and saving for unexpected events)."

Use an allowance as an educational tool. An allowance is an ideal way to teach about responsible spending/saving, says Suzanna de Baca, vice president of wealth strategies at Ameriprise. "Provide your children with the opportunity to save and spend their allowance or earned money as they please (with some guidance). This flexibility will allow them to learn early on that spending money as fast as they earn it can have consequences. Depending on the age and maturity of your child, you may choose to share with them a financial mistake you made in the past and how you recovered."

Plan for college. As college tuition grows, many parents worry about how their children will afford to attend. "As parents, consider beginning to save into a 529 plan early in your child's life and ask your child to contribute once he or she begins earning their own money," says de Baca. "When it comes time to make college decisions, help your child evaluate the tuition and other college expenses (travel home, Greek or club dues, entertainment costs, etc.) for each college he/she is considering. Make sure to educate yourself on current student loan lending practices and options and help your child determine a realistic amount of student loan debt he/she can take on."

Prepare for life's big purchases. Even for young adults with a responsible mindset, a lack of financial knowledge can be detrimental for large purchases like a car or home. As a parent, you can offset this concern by being open to discuss these things as they grow older and begin managing their own money.

Reframe your money mindset. Changing the way you think about money can go a long way to alleviating your financial fears for your children and, at the same time, help your children learn to make smart financial decisions. Runestad's take: "The real question you should ask isn't, 'Can we afford this?' but rather, 'Do we need this, and if so, is this the best deal we can get on it, and should we wait and buy it when we have saved the money for it?' These may seem like small differences, but they aren't. How our children think about money will make a huge difference in their ability to wisely manage it and consequentially will have a huge impact on their quality of life."

Michele Lerner is a Motley Fool contributing writer and has no position in any stocks mentioned. The Motley Fool owns shares of Citigroup. Try any of our newsletter services free for 30 days. ​

Going from vacationer to victim is more common than you might think. A new study by Experian's ProtectMyID found that 18 percent of consumers have had an item with sensitive information (e.g., a credit card, smartphone, license, passport) lost or stolen when on the road. Five percent have been victims of identity theft while traveling; 5 percent have traveled with someone else who was a victim; and 21 percent know someone who has experienced identity theft when traveling.

Only 33 to 39 percent of travelers follow some good precautions, such as alerting their debit or credit card providers before departing, notifying their bank, using hotel safes to store sensitive information or using passwords to protect their smartphones.

According to Becky Frost, senior manager of consumer education for Experian's ProtectMyID, there's a mismatch between where travelers feel most vulnerable and where identity theft actually occurs.

Resolving issues caused by an identity theft can take several months to clear up. Here are some techniques that will help protect you.

Before You Go:

Guard against mix-ups. Notify your credit card issuers before you leave on a vacation, especially if you're traveling internationally, suggests Julie Springer, vice president at TransUnion. "If your banks and card issuers know that you're traveling, they are less likely to put a credit fraud alert on your account or mistakenly block your access when charges from unusual locations appear," she says. If your card issuers know where you're traveling, they'll notice if there are charges coming from some other location.

Make photocopies of important documents. If you have copies of your credit cards, driver's license, and passport, it will make the replacement process much faster if you lose one. Leave a set of these documents at home with a friend, and store a set in a separate piece of luggage.

Leave things at home. Avoid traveling with unnecessary documents, such as Social Security cards or unneeded credit cards. They're just more fodder to tempt thieves.

Use good passwords. Frost recommends that everyone password-protect their smartphone and other devices. "Create strong passwords with a mix of uppercase and lowercase letters, numbers, and symbols on sensitive accounts accessible through electronic devices," Springer suggests. Minimize the damage of a stolen smartphone.

While You're Away:

Be careful in your hotel. "Don't let your guard down in your room," says Stacey Vogler, managing director of Protect your Bubble, a company that offers insurance and identity theft protection products. "Theft can occur in hostels and even in five-star hotels."

Be careful with your camera and posting information online. Frost recommends disabling geotagging on all cameras, especially if you plan to post any photos online. She recommends delaying social media posts that indicate you're out of town. Wait until you're back from your trip to share your travel adventures.

Use credit. Pay with credit cards rather than debit cards; they often offer better fraud protection.

Watch where you get cash. If you are going to make a cash withdrawal, find a branch of your own bank if possible. Using ATMs located in high-traffic tourist areas can put you at risk for skimming.

Finally, when you're back home, closely check the activity on your financial statements to make sure charges match up with your actual activities. If you suspect any funny business, pull your credit reports from all three credit reporting companies.

A recent survey of 1,010 married people by Experian (EXPGY) Consumer Services division found that 95 percent of those polled rate financial responsibility as an important attribute in a spouse. Compare that to physical attractiveness -- often the first criterion we use to judge potential mates -- which was deemed an important trait for compatibility by just 86 percent. (Personal compatibility led the list at 98 percent.)

Financial communication can be an important barometer of how successful a relationship will be, although women place more of a premium on it than men. Among those surveyed, 73 percent of women and 60 percent of men said that being open about personal finances and credit makes a person more attractive as a spouse. On the flip side, 59 percent of women and 44 percent of men say that a partner who avoids talking about those things is less attractive as a spouse.

What's Your Number?

"Financial debt and a person's credit score are so important to disclose before you tie the proverbial knot," says Les Parrott, co-author with his wife, Leslie, of "Making Happy" and "The Good Fight." "We can tell you about lots of disastrous money surprises when a person isn't up front about this."

It's important to discuss all aspects of your individual and shared financial situations regularly with your significant other, but because your credit score will impact your ability to make major purchases like a home or a car, it's especially important to determine whether a low credit score tied to one or both of you may affect your long-term goals, says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial (AMP).

"An important step toward having a successful relationship is being willing to share your feelings about money with your partner. This includes being honest about past and present items, like your credit score," says Terry Siman, certified financial planner and managing director at United Capital in North Wales, Pennsylvania. "When money conversations are put on the back burner, issues start to develop."

Talk to Each Other

Most adults come into relationships with financial habits and beliefs already in place -- like biases about debt, spending and saving for the future. "Both partners must discover what matters most to themselves and to their partner financially," Siman says. Without those conversations and clear communication, money conflicts can grow and fester.

Women said the maximum they would spend without consulting a spouse was $396; for men, the maximum was $1,231.

Spending is one area where tensions can quickly build up. The Experian survey showed a big gap between what men and women feel is an appropriate amount to spend without first discussing it. Women said the maximum they would spend without consulting a spouse was $396; for men, the maximum was $1,231.

Parrott suggests that jointly agreeing on a limit for spending that can happen without input from the other spouse creates a sense of shared responsibility and mutual respect.

De Baca agrees that it's a good practice to discuss large purchases that will impact day-to-day spending or the ability to reach long-term financial goals, but points out that what's considered a large purchase may vary from family to family.

Of course, that limit will change as a couple's situation changes. Siman suggests considering what amount you can safely spend on an impulsive purchase and what amount should force you to think about that type of expenditure. "Remember, relationships need compromise. Both partners must discover what matters most to themselves and to their partner financially. When there is clarity over what each person's priorities and limits are, goals can be achieved together."

]]>20s30sAmeriprise Financialcompatibilitycredit scorefinancial infidelityfinancial responsibilityhousehold budgethousehold financesLes ParrottmarriagespouseMichele LernerFri, 20 Jun 2014 10:18:00 ESTDon't Lose Your Share of $48 Billion in Credit Card Rewardshttp://www.dailyfinance.com/2014/06/19/keep-your-credit-card-awards/http://www.dailyfinance.com/2014/06/19/keep-your-credit-card-awards/http://www.dailyfinance.com/2014/06/19/keep-your-credit-card-awards/#commentsFiled under: Banking, Personal Finance, Credit Cards, Credit Score, SavingAlamy
Consumers with good or excellent credit often play the game of switching their loyalty from one card to another to accumulate airline miles, hotel room vouchers, gift cards or cash back, so that they can enjoy maximum rewards. At least that's how it's supposed to work.

But a recent study by CardHub shows that while credit card companies provide about $48 billion in rewards each year, about one-third of those rewards are never redeemed.

Some of the blame for leaving money on the table (or in the hands of credit card companies) lies with consumers who forget about the rewards points they've been earning. But the study also found that limitations set on redemption and the way points can be earned prevent cardholders from using credit card rewards programs to their maximum potential.

Credit Card Rewards Programs Compared

CardHub's study compared rewards credit card offers from the 10 largest credit card issuers, reading the fine print on dozens of rewards programs, to see which ones were the easiest to use. Then it scored the credit card companies in several categories, such as:

Capital One (COF) cards received an overall "Rewards Friendliness" score of 96.43 percent because its cards have the fewest rewards limitations. In addition, Capital One received the highest score (100 percent) in the "Rewards Redemption" category.

Bank of America (BAC) received the highest score (100 percent) in the "Rewards Expiration" category -- for having the longest-lasting rewards.

Barclays' (BCS) Barclaycard, Capital One and Wells Fargo (WFC) each received a 100 percent score for the "Rewards Earning" category.

The Discover (DFS) It Card has the most rewards limitations of all the credit cards reviewed and earned the lowest overall score (50 percent). It received the lowest score in the "Rewards Redemption" category (60 percent), and it tied with Citibank (C) and Barclaycard for the lowest score (33.33 percent) in the "Rewards Expiration" category.

CardHub found that the most common requirement among credit card rewards programs that prevent consumers from redeeming rewards is a minimum spending threshold. Rewards expiring after a missed payment were the most common limitation among the cards.

A recent Bankrate study looked at 54 cash-back credit cards from 21 credit card companies and found that the companies are offering sign-on bonuses to entice new customers, but they're requiring consumers to make a minimum amount of purchases within a small introductory period to earn those bonuses.

For example, 19 of the 30 cash-back credit cards that offered a sign-up bonus required consumers to spend between $500 and $3,000 on the cards within the first three months of having them. Only three cards handed over the bonus just for making a single purchase: the Barclaycard Rewards card, the Affinity Federal Credit Union Pure Rewards Visa (V) and the Priceline (PCLN) Rewards Visa.

Credit Card Rewards Tips

CardHub and Bankrate offer these tips for consumers looking for the best rewards credit card:

Go with a cash-back credit card for the easiest way to accumulate rewards. Cash-back cards have the bonus of letting you use your rewards to pay your bill.

Watch out for credit cards with a zero-percent introductory rate. If you carry a balance and think you might not pay off the balance in full before the introductory period expires, check to see what the annual percentage rate will be before you accept the new card. You could end up paying more in interest when the intro period ends than you're paying on your current credit card.

Look for a sign-on bonus. If you have excellent credit that won't be hurt by signing up for a new credit card, get a new one each year to accumulate up to $400 in cash or airline miles.

Read the fine print. Make sure you understand the minimum spending threshold you need to meet before you earn rewards, and whether there's a cap on how much you can earn each year and on how much you can redeem each year.

Set your bills on autopilot. CardHub found that one of the most common reasons cardholders lost their rewards was that they missed a payment, so set up an automatic payment for at least the minimum each month.

Avoid rotating categories. If you have to sign up for different rewards categories or the categories for earning the most points change periodically, you're less likely to earn the maximum rewards.

Redeem your points before you close an account. It's best for your credit score to keep older accounts open anyway, but if you decide to cancel a credit card, make sure you redeem your rewards points first; otherwise they're gone forever.

Try an "everyday" rewards card. Unless you're extremely loyal to one airline or hotel chain, it's best to get a rewards card that lets you choose from a variety of rewards and allows you to redeem your rewards earnings at least twice a year.

Playing the rewards game can be valuable, but you need to stay on top of the rules and restrictions in order to maximize your winnings.

Michele Lerner has no position in any stocks mentioned. The Motley Fool recommends Bank of America, Priceline Group, Visa and Wells Fargo. The Motley Fool owns shares of Bank of America, Capital One Financial, Discover Financial Services, Priceline Group, Visa and Wells Fargo and has the following options: short June 2014 $48 puts on Wells Fargo.

Getting a definitive answer can be a challenge. Sources have different ways of gathering and looking at "average" credit card balances. For instance, MagnifyMoney.com recently released survey data that showed that 42.4 percent of Americans carry credit card debt:

$10,902: Average balance for those with credit card debt.

$8,864: Average credit card balance for millennials.

$12,026: Average credit card balance for Generation X.

Those numbers, while based on a survey of 1,435 people in April, are not far off from numbers reported by NerdWallet.com that are based on government data, including Federal Reserve statistics.

$7,087: Average household credit card debt.

$15,191: Average balance for households that have any credit card debt.

In NerdWallet's analysis, households with zero credit card debt skew the overall average lower, and households with debt skew higher because of a relatively small number of households with extremely high credit card balances.

In 2013, CreditCards.com studied average credit card debt with different variables. For example:

$5,047: Average balance per American adult with a credit card.

$2,720: Average credit card debt per U.S. adult with a credit report and a Social Security number.

$3,364: Debt per person for all resident American adults.

$7,100: Average debt per household with credit card debt.

What data is gathered is yet another reason for all these variations in average credit card debt. As mentioned, the numbers vary dramatically depending on whether or not people who have credit cards at all are included in the calculations.

Another factor is the way "credit card" is defined -- for example, whether store and gas credit cards are factored in. While those cards typically have low credit limits and balances that don't influence the overall amount of debt on a national basis, they do increase the number of people who can then be defined as "credit card" users.

Another issue is that some people charge items on their credit card and pay off the balance in full every month. But even that balance is included in statistics.

CreditCards.com asked Experian in March 2013 to separate its data:

$8,220: Average balance for credit cards that usually carry a balance.

$1,037: Average balance for credit cards that are typically paid in full each month.

Paying Off Credit Card Debt

No matter what level of credit card debt you have, you're likely to be eager to pay it down to a zero balance.

Keep in mind that while you need to have an emergency fund in the bank, you're earning minuscule interest on that money if it's in a traditional savings account. (There are better alternatives.) Even a "high-yield" savings account in 2014 pays barely 1 percent in interest, while your credit card interest rate is likely to be more than 15 percent. MagnifyMoney's survey found that 75.7 percent of people with credit card debt were paying an interest rate higher than 15 percent in April.

Some of the tried-and-true strategies to eliminate credit card debt include:

Use the "snowball" plan: Pay as much as you can on your lowest balance while you keep up with the minimum on all other cards. As soon as that card is paid off, apply what you've been paying plus the minimum (and more if you can) to the next highest balance, and so on until you're throwing all available funds at the last credit card.

Pay off your high-interest debt first: Rank your credit cards in order from the one with the highest interest to the lowest, and then apply the snowball strategy to debts in that order instead of according to the balance.

Use balance transfers: Eliminate interest payments while paying down your debt, but be aware of the interest rate if you don't pay off the balance in full before the 0 percent interest period expires. Typically you also need to pay a fee of 2 percent to 4 percent of the balance when you transfer the debt.

Cut up your cards to cut off temptation: Make sure you don't use your credit cards and build up the balance again. But don't close the accounts; that can hurt your credit score. Keep one card available for a true emergency.

Accruing too much credit card debt is a lot easier than eliminating it, but you'll find it much easier to save toward other goals if you stop sending your paycheck to the credit card companies. Plus, when it comes to credit card debt, it feels a lot better to be way below average.

]]>20s30saverage credit card debtaveragecreditcarddebtcredit cardshousehold debtpaying off credit cardspaying off debtMichele LernerWed, 11 Jun 2014 12:03:00 ESTYou Need a Savings Account - and You Deserve a Better Onehttp://www.dailyfinance.com/2014/06/11/better-savings-accounts/http://www.dailyfinance.com/2014/06/11/better-savings-accounts/http://www.dailyfinance.com/2014/06/11/better-savings-accounts/#commentsFiled under: Banking, Interest Rates, Savings AccountsLinda Matlow/Alamy
When interest rates on savings accounts hover near 0 percent, it's easy to see why so many people shrug off the question about where to park their emergency cash. Financially savvy people assume that they can get better returns by putting money in stocks or mutual funds instead of letting the it "languish" in a low-interest savings account. But everyone needs a place to keep some liquid cash.

Think of it this way: If you have your paycheck deposited into a checking account for paying bills, and sweep all your leftover savings into a retirement fund or an investment account, what will you do when you have an emergency like:

Your car breaks down and needs a costly repair the same week that you're paying your mortgage and an estimated tax payment.

Your condo association informs all owners that the cost of repairing the roof of the building after a rash of storms has depleted the condo reserves, and therefore all owners are required to pay a special one-time assessment.

Your child gets sick and needs an expensive medication, but you just dipped into the cushion in your checking account to pay the previous month's doctor's bill.

When you need cash fast, most options come with undesirable side effects. Pulling money out of an investment account can take time and sometimes incur penalty fees and taxes. On top of that, you could be forced to sell investments at an inopportune moment. Using a credit card can mean you're borrowing money at an average interest rate of 15.61 percent, according to Bankrate.

A savings account provides the necessary back-up funding for your checking account and give you the peace of mind that you don't need to rely on credit or tap into your investments when the unexpected occurs.

And while its low interest rates means that a savings account is not the go-to investment for future expenses (the "future" being anywhere from next week to five years from now), it is the right place for cash to serve as a safety net for unexpected expenses as well as a temporary parking spot for planned future purchases. That said, keeping your cash accessible doesn't mean settling for zero interest.

Why Compare Savings Accounts

A recent survey by MagnifyMoney.com revealed that 73.4 percent of Americans with savings accounts keep their money in a traditional savings account that currently pays interest rates close to 0 percent, and of those who have a savings account, the average balance comes to $28,696.
By shopping around among bank, credit union and online-only savings accounts, you can find one that will increase the interest you earn, lower your fees and still meet your needs.

The survey showed that millennials are more likely to have an online savings account (18.8 percent vs. 13 percent of non-millennials) and they're also more open to considering an online-only savings account (55.1 percent versus 28.2 percent).

Internet-only accounts often pay 0.9 percent or more on savings, according to MagnifyMoney, while bank savings accounts are paying as little as 0.01 percent. Switching from a traditional account to an online savings account means that the average American (with that $28,696 balance) would earn more than $250 a year on their cash stash instead of settling for just $5 a year in interest.

Fees. Some savings accounts charge fees unless you meet minimum balance requirements or have established direct deposit. Any fees will cut into the limited interest you earn.

Interest compounding. For the maximum interest earnings, make sure interest is compounded daily.

Overdraft protection. If you're concerned about overspending on your checking account, make sure you can link the savings account to provide overdraft protection.

Account set-up. If you're interested in saving for a variety of specific goals, such as a vacation or a down payment on a house, you may want to look for an account that allows you to set up sub-accounts so you can more easily track your savings.

Availability of funds. Find out how quickly any deposits are credited and how long it will take to transfer from one account to another. Accounts within the same bank usually allow instantaneous transfers, but some online-only savings accounts can take a day or so to complete a transfer.

Check on Federal Deposit Insurance Corp. insurance. While most savings accounts are FDIC-insured, take a moment to double-check on the insurance so that you don't risk losing your money. One of the main benefits of a savings account is the lack of risk.

Check the rules on withdrawals. Most savings accounts and money market accounts limit their customers to six withdrawals per month. Find out what happens if you make too many withdrawals.

Checking out the requirements and fees on multiple online-only accounts takes a few extra minutes longer than just opening a savings account at your usual bank. But if that time results in increased interest earnings of several hundred dollars per year, it's definitely worthwhile.

The signs of emotional or sexual infidelity -- such as Facebook (FB) flirting, whispered phone calls or secret texting -- may be easier to spot. But financial cheating can be just as damaging to a relationship.

The survey finds that three in 10 people have committed a minor financial infidelity such as keeping a bill from their partner, but 13 percent admit to more serious deceptions, such as lying about their credit card debt or their income. "The two most common forms of financial infidelity are squirreling away substantial sums of money to be spent on a guilty pleasure or hiding payroll records from a spouse in order to control information and perceptions," says Paul Nourigat, a senior wealth strategist, relationship coach and author of "No Time to Wander: The Financial Compass for Young Americans."

Warning Signs of Financial Infidelity

The first warning of financial infidelity often comes when something doesn't feel quite right, says Terry Savage, financial columnist and co-author of the new book "The New Love Deal: Everything You Must Know Before Marrying, Moving in or Moving on." "If you keep everything in a joint checking account, and if credit card statements come to your home, it should be easy to see where the money is going," says Savage. "Unexpected debits for cash from a debit card, unusual credit purchases, or accounts that don't 'balance' will lead you right to the money leak."

Not all couples fully merge their finances, though. If a couple has agreed to keep separate funds for personal money, then neither of them should complain about a new golf club or a pair of shoes, she says. "After all, if you're sticking with your plans to fund household expenses, retirement accounts, and savings, then a little splurge won't hurt," she says. "However, if the purchase is something you will have to contribute to paying for or will impact your life -- a new car, a cruise -- then you need to sit down and have a conversation about sharing money plans."

Nourigat says that red flags should go up when one partner doesn't want to talk about the couple's finances or can't account for larger purchases or disappearing cash. "We all have our rituals and approaches to things, but financial solvency for a household is dependent on each partner working in concert with the other," he says.

If you suspect that your partner's financial infidelity is more serious and is related to marital infidelity, Savage says you need to go into "detective mode." "You'll be looking for credit card receipts, checking into email and Internet search history on his or her computer, and even phone logs," she says. "By the time you get to suspecting that sort of financial and marital infidelity, the trust in your relationship is definitely shaky."

Rebuilding After Financial Infidelity

There's no question that talking to your partner about potential financial infidelity will be stressful, says Patricia Seaman, senior director with the foundation. She recommends thinking ahead about what you want to get out of the conversation and being up front about the subject rather than springing it on your partner when you're out to dinner or a movie.

"If the financial infidelity revolves around an emotional, but hidden splurge, you can certainly rebuild your trust -- and your financial life together -- but only if you make a plan and stick to it," says Savage. Se suggests that each partner pull their free credit report from www.annualcreditreport.com and share it as a beginning step towards full disclosure. Next, she recommends creating a spending and savings plan. Some decisions you need to make:

Whether to pool all your income in one household checking account or keep separate accounts with automatic transfers into a joint account for regular household bills.

Whether to contribute equally or proportionately by salary into the account.

How much to contribute to future savings for a vacation, a car or college and to retirement accounts at work and an individual retirement account for a non-working spouse.

"As you discuss money, remember two things," says Savage. "First, by the time you reach this stage in life, your 'money personality' is well defined. Likely, you're either a 'saver' or a 'spender.' It's hard to move past your inner money personality without setting up systems to either organize or curb your spending habits. Second, remember that most money arguments are not really about the money; they are about the power of money. So, if one of you insists on continuing financial infidelity, buying expensive things that do not fit into your plan, then I suggest counseling to find out whether these money excesses represent a need to be heard, to be empowered in the relationship."

Nourigat says that since everyone makes mistakes, it's usually possible to rebuild after a financial infidelity. "Honesty, transparency, and a commitment to work together on financial planning and following through with agreements will help most couples rebuild trust and avoid the angst which is otherwise likely," he says. "If working together becomes a challenge, engaging an independent third party, such as a CPA or financial planner is recommended. After that, consider a marriage counselor."

]]>cheatingdivorcefamily financesfamily moneyinfidelitymarriageoverspendingMichele LernerWed, 04 Jun 2014 10:47:00 ESTParents: Stop Letting Your Children Control Your Financial Lifehttp://www.dailyfinance.com/2014/06/04/parents-stop-letting-your-children-control-your-financial-life/http://www.dailyfinance.com/2014/06/04/parents-stop-letting-your-children-control-your-financial-life/http://www.dailyfinance.com/2014/06/04/parents-stop-letting-your-children-control-your-financial-life/#commentsFiled under: Family Money, Personal Finance, Financial EducationGetty Images
We've all heard about helicopter parents -- and some of us admit we are them -- but a new survey by Coldwell Banker Real Estate indicates that children of younger parents have an outsized influence when it comes to piloting the family's financial decisions.

The "Parenting and Homebuying Study of American Parents" surveyed 2,800 parents of multiple generations about spending decisions made when their children were 18 or under. It showed that 79 percent of millennial parents (age 18-34) and 70 percent of Gen X parents (age 35-59) said that most of their major purchasing decisions revolved around their kids. Only a little over half (52 percent) of boomer parents (age 50-69) and just 41 percent of parents age 70 and older said they made major purchasing decisions that revolved around their kids.

Robi Ludwig, a psychotherapist and lifestyle consultant for Coldwell Banker Real Estate, says there has been a shift in the past 30 years in attitudes about major lifestyle and financial decisions, such as moving. "It used to be that when parents wanted or needed to move, they would do it, and the kids would adjust. But Gen X and millennial parents are more focused on their kids and how any change will impact them. Some of them drag their feet even if they know their house is too small or their commute is too long because they're putting the needs of their kids before the needs of the parents."

Generational Shift in Attitude Toward Family

When it comes to moving, the survey showed that 67 percent of millennial parents and 64 percent of Gen X parents cared most about the immediate impact on their kids' emotional well-being, while just 54 percent of boomer parents and 42 percent of parents age 70 and older said that was of primary importance in their decision to move or not.

Younger parents are more likely to want to live near their own parents or their in-laws than their own parents' and grandparents' generations were. Just 29 percent of parents age 70 and older said that when they were raising children they wanted to live near their parents or spouse's parents, and 43 percent of boomer parents said this was a priority.

Ludwig says that when immigrant families first come to the U.S., they often live in multigenerational households or with other relatives in nearby homes. "Over time, people got tired of living someplace where everyone knows each other's business, and they started to want to establish their independence and set boundaries for their relationships with their relatives," she says. "People started moving farther away from family members, but now we're seeing a shift back to a more middle ground with families wanting to live near each other."

"Millennials actually like their parents and think of them as friends," Ludwig says. "Gen X and millennial parents also like the idea of their kids having a relationship with their grandparents and want to know they're around so they can rely on them." These attitudes are reflected in the survey results, with 62 percent of millennial parents and 57 percent of gen X parents saying they want their mothers, fathers or in-laws nearby.

Balancing What's Best for the Kids and Best for You

Putting your children at the center of your decision making may send the wrong message to your kids. ""Parenting styles have changed to from a dominant to a collaborative style in which parents have a lot of respect for their children's perspective and want their kids to avoid pain at all costs," she says. To find the right balance when making a big financial decision -- such as whether to move, to accept a new job or make some other big purchase -- Ludwig suggests following these strategies:

Look at long-term impact of your decision, both financially and emotionally. "If you look at the big picture, you can see that taking a new job or moving to a new home can open up new opportunities for your family," she says.

Don't over-emphasize the short-term discomfort of change. "Intellectually we know you have to experience some pain in order to have growth. Change is a part of life and a move at the right time can teach kids resilience."

Include your kids after you've made the decision. "Once you've decided that a new job or a new house will have a positive long-term impact on you and your family, then you can include your kids in the process of moving and encourage them to see the change as a positive experience," says Ludwig. "Point out that they can stay connected through social media to their friends and find community resources to help them adjust."

When it comes to making big life decisions, it's important to remember who the adults are in your family and not let your kids rule the roost.

The transition from military to civilian life can be fraught with emotional challenges, but practical things like getting a job, finding a place to live and paying bills can be just as difficult. Many veterans entered the military young, having never received much guidance about money management. If they've never spent much time as adults out of uniform, they are likely to need extra help to learning to handle debt and homeownership issues, and advice on creating a personal financial plan.

When Mechel Lashawn Glass returned from her deployment as an Army intelligence analyst in Turkey during the Persian Gulf War in the early 1990s, she moved back in with her parents. Glass had joined the military and left home at 17; she returned home as an adult, but without a job or a home.

"There used to be a two-year transition for veterans before they left service so they could put a plan in place and decide where they wanted to live and what they want to do with the rest of their lives as civilians," says Glass. "Now with the drawdown, many veterans are given 30 to 60 days' notice to leave the military and start a new life. The emotional, physical, and behavioral challenges for veterans are unique because so many of them have been overseas for years and don't really know where to begin. They usually go home but find that their families and friends have all changed or even moved away."

A Hard Homecoming

Glass stayed with her parents for a little while but the emotional trauma of her deployment left her withdrawn and difficult to communicate with, she says, so her mother asked her to leave the house. She eventually pulled herself together, found an entry-level job with IBM, and used her military benefits to go to college and eventually get a better position with the company. Today she is vice president of education for ClearPoint Credit Counseling Solutions.

Finding civilian employment. "Since the drawdown started, more veterans are coming back home to look for employment," says Glass. "The problem they're having is how to equate military experience with private employment."

Glass says her résumé wasn't that good when she looked for her first job after deployment, but that IBM embraced her military experience and loved her sense of discipline and work ethic. For those looking for help, she says that the Veterans Affairs department has a career center and programs to help vets find jobs and that the Department of Labor has a program to help vets reconfigure their résumés to explain how their experience could benefit a private employer.

Handling credit card debt. "People who are deployed are in an extremely high-stress environment and it's pretty common for them to spend a lot of money when they're not on duty," says Glass. "They don't have to pay for their clothes or their day-to-day living expenses, so they often feel they have money to blow. Unfortunately, this often leads to running up extensive credit card debt that they can't always pay back. ... Private employers sometimes check a job applicant's credit just to make sure they don't have major financial problems," says Glass.

But it's different in the military, where, she says, there's usually no credit check until you want to apply for a job that needs a security clearance. "Debt problems can keep you from getting the clearance you need, which means you can't get the job you want." Glass recommends tackling the debt one balance at a time. Veterans who need more help should look for a nonprofit credit counseling service.

Dealing with housing problems. Glass says it's traditional for many members of the military to buy a home near the base where they're stationed and then sell in two or three years when they're relocated. But the housing crisis left many service personnel underwater and unable to sell their homes. That, coupled with the difficulty in obtaining civilian employment, has caused many veterans to lack the means to maintain their mortgage payments. Glass says one option is to refinance with a VA home loan.

"Any vets who are having trouble paying their mortgage should go to their lender and tell them they're a vet and ask for programs that could help them keep their home," says Glass. "If that doesn't work, then go to a nonprofit counseling agency that can act as an intermediary and work through the situation with a lender."

Signing up for benefits. "Most vets don't want to ask for help, but it can be hard to come out of deployment and pay for everything yourself for the first time in your life and to find employment quickly enough," says Glass. She says VA.gov is the place to start looking for the variety of programs and benefits that can help servicemen and -women get on their feet as civilians.

Veterans needn't try to navigate these challenges on their own. Reaching out for the assistance that is available through government and military programs, as well as putting into play a personal financial action plan, can help ease the stresses of returning to civilian life.